U.S. ETFs See 'Record Boom' This Year… $1.4 Trillion in Inflows

Record numbers for new launches and trading volume

"Need to prepare for increased volatility, etc."

Concerns over rapid growth

The U.S. exchange-traded fund (ETF) market has experienced a record boom this year. Some market participants are voicing caution over the "record expansion."

According to Bloomberg Intelligence, as of the 19th of this month, U.S.-listed ETFs set record highs across three key indicators: fund inflows, number of new products, and trading volume. This is the first time since 2021 — when liquidity surged after COVID-19 and an "investment boom" occurred — that all three indicators have simultaneously reached record highs in a single year.

Global funds flowing into U.S.-listed ETFs during this period amounted to $1.4 trillion (about KRW 2,037 trillion). This surpassed last year's previous record of $1.1 trillion.

Approximately 1,100 new U.S.-listed ETFs were launched this year, an increase of 51.72% year-on-year. Annual ETF trading volume also hit a record. Year-to-date trading amounted to $57.9 trillion (about KRW 84,152 trillion), up roughly 40% from last year. The growth of active ETFs was also notable. Active ETFs accounted for 84% of all new ETF launches and attracted more than 30% of total inflows into these products.

However, there are voices of concern about the rapidly growing ETF market. Eric Balchunas, a Bloomberg Intelligence ETF analyst, warned, "Next year there is a possibility that, in some form, a 'period to reassess the gap between expectations and reality' will arrive." He said, "Because the ETF market has had such a perfect year, it is a time to prepare," adding, "One should consider various risk scenarios, including increased market volatility, shocks from leveraged single-stock ETFs, and tax issues related to mutual-fund-based structures."

Reporter Seon Han-gyeol always@hankyung.com